ECON – Exam 2 Practice Test (Part I: Multiple Choice)

GDP measures:

• Total income of citizens

• Market value of all final goods/services produced within a country

• Total exports minus imports

• Value of intermediate goods

Which of the following is NOT included in GDP?

• Final goods

• Services

• Intermediate goods

• Government spending

Which method is NOT used to calculate GDP?

• Expenditure approach

• Income approach

• Value-added approach

• Production possibilities approach

Which of the following is a component of the expenditure approach?

• Depreciation

• Net exports

• Transfer payments

• Underground economy

Nominal GDP differs from real GDP because:

• It includes depreciation

• It adjusts for inflation

• It uses current prices

• It excludes exports

Real GDP would be understated if which of the following occurs?

• Non-market transactions are not included in GDP calculations.

• All goods and services are accurately measured.

• Inflation is overestimated in the deflator.

• Underground economic activities are fully reported.

Net Domestic Product (NDP) is calculated by:

• GDP + depreciation

• GDP - depreciation

• GDP × inflation

• GDP - net exports

The unemployment rate (U-3) is calculated as:

• Unemployed / Population

• Employed / Labor force

• Unemployed / Labor force

• Labor force / Population

Which of the following is NOT a type of unemployment?

• Frictional

• Cyclical

• Structural

• Seasonal

• All are types

Which type of unemployment is caused by a recession?

• Frictional

• Structural

• Cyclical

• Seasonal